Blood, Sweat and Plano Short Sale

Hang on to your house we are going into a Plano Short Sale!

I think I will use the line above for homebuyers who are interested in purchasing a Plano short sale property as their primary residence. Best line I ever heard though is “there is nothing short about a short sale”.So if you don’t know what a short sale is here’s a brief explanation.

A short sale occurs when the homeowner asks the lender or lenders - there can be more than one lender - to accept a smaller payoff on the home’s mortgage(s) than what is owed. A short sale is an alternative to a foreclosure for both the homeowner and the lender. Homeowner qualifications vary but most all of them share one thing in common.

Homeowners eligible for a short sale have experienced a significant life change. An example of a significant life change would be the loss of income due to job loss or extended illness. Whatever their reason the homeowners are no longer capable of making the mortgage payments and must sell to prevent a foreclosure. What is one seller’s loss can be a buyer’s gain in the pursuit of a short sale property.

Any homebuyer considering the purchase of a short sale property for their primary residence needs to carefully consider the time constraints. Short sales can take months from start to finish and some stories are told of even taking years. The good news is that there are some new rules and regulations recently put into place designed to improve the performance of the process by the various lenders.

The new regulations implement mostly time constraints on the lenders in responding to the parties involved in the sale. Having closed on the purchase of a Plano short sale property recently  I can tell you that the whole process can be demanding on all parties. Sellers and their listing agents need to have their paperwork in order from start to finish, stay in tune with the lender, be cooperative with lender’s requests which are often duplicated and keep the buying side informed. Buyers and their selling agents need to be cooperative in submitting requests for information or duplicated paperwork and work cooperatively with the listing agent.

Buyers also need to be flexible in their ability to move or rearrange their schedules sometimes with little to no advance warning. Short sales are not for the faint-hearted or the impatient. If a buyer needs to be in a new home by a given time they need to be sure that their time frame allows for postponements or other delays. Or have an alternative living arrangement.

Some issues develop due to sellers who become distressed or uncooperative in the long-haul. Listing agents need to be sensitive to their needs but firm in guiding sellers to their goal of limiting the damage to their future home buying ability. With a short sale on their credit report most sellers are able to purchase another home within 3 years. That is significantly better than the 7 years a foreclosure imposes. Like foreclosures, short sales are here to stay. The frequency of short sales and foreclosures is on the decline. That is good news for all Americans looking to fulfill their dream of homeownership.

One last note, not all short sales follow the same pattern above. Some short sales are processed in a timely fashion. If you are considering a short sale either as the seller or the buyer please take some time to become familiar with short sales and find a good, local agent to assist you.